Tenant arrears up from a downward trend

Serious rent arrears rose on an annual basis for the first time since 2012, according to the latest tenant arrears tracker report.

The LSL Property Services data for Q4, 2014 showed a rise in tenant rental arrears.

They reported that now 68,100 tenants were in severe rent arrears ( arrears of more than two months). This is an annual rise of 7.2%.

Despite the rise, figures are still far off the Q3, 2012 peak, when LSL reported 116,600 tenancies in severe arrears.

Adrian Gill, director of estate agents Your Move and Reeds Rains, remained positive that the downward trend on arrears would return, saying

‘The long term trend is increasingly clear. Since the sharpest pinnacle of tenant difficulties in 2010 the number in serious rent arrears has practically halved,’ 

‘As rising wages start to combine with much lower levels of unemployment, the fundamentals of the economy have started to turn in favour of tenants. If that can continue, then so can the trend away from arrears, as renting becomes more affordable,’ 

The LSL data also reported a 4.4% drop in eviction rates, with an annual tenant eviction rate down by 6.0%.

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Halifax House Price Index Q4,2014

The Halifax house price data for Q4 2014 showed a slowing UK property market.

• Average house price grew by 0.3% in Q4,  the lowest growth rate since November 2012 (-0.3%). 
• This slowing growth rate meant annual house price growth has fallen from a peak of 10.2% in July and is now at 7.8%. 
• Average house prices grew by 0.9% between November and December.  

Commenting, Martin Ellis, housing economist, said:

"House prices in the final three months of 2014 were 0.3% higher than in the preceding three months. The quarterly rate of increase has now fallen for five successive months. Annual price growth also eased further, to 7.8% in December. This compares with a peak of 10.2% in July.

“The deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, have combined to temper housing demand since the summer. The weakening in housing demand has led to a reduction in both price growth and sales in recent months.

"We expect a further moderation in house price growth over the coming year with prices nationally predicted to increase in a range of 3 to 5% in 2015. Housing demand, however, should continue to be supported by a growing economy, rising employment levels, still low mortgage rates and the first gain in ‘real’ earnings for several years." 

Download the Halifax Q4, 2014 House Price Index Report



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Scottish rental index hits high

Citylets rental data for Scotland in Q4,  show the average rent in Scotland has saw 7.9% growth over 2014, hitting a all time high of £732 pcm.

The rises have been driven by rent rises in Aberdeen, Edinburgh and Glasgow, with the majority of Scottish towns seeing smaller rises below the general rate of inflation.

Citylets warn that the downward pressure on oil prices could result in a 'cooling' rental market in Aberdeen.

 

Download the Q4, 2014 Rental Report from Citylets.

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NHF call for longer tenancies

We warned this year would bring a din of 'beefy talk on additional regulation, licensing, tenancy reform and rent caps', so here's some more.

The National Housing Federation have joined the call for longer tenancies, citing new research that shows that private renters are now nine times more likely to have moved in the past year than homeowners leading to tenants feeling uprooted and unable to plan for their futures.

The builders lobbying organisation is no doubt using the tenant dilemma argument to push Government to further relax planning laws.

David Orr, chief executive of the National Housing Federation, said:

“With house prices continuing to soar out of reach, and typical deposits for first time buyers hitting £30,000, younger generations are seeing their dream of home-ownership replaced with a life of renting.”

“It’s clear that the younger generation is being let down, and given no alternative but to move from one short-term let to the next, never being able to save enough to buy because their wages are eaten up by rent.”


“We’ve found that nearly eight out of 10 people (77%) in England don’t believe any of the main political parties will effectively deal with housing [7], but they still have the chance to put that right. With a bold long term plan for house building our housing crisis is solvable. We need politicians from all sides to commit to ending the housing crisis within a generation."


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CBRE 2015 UK property forecast

Property consultancy, CBRE have laid out their 2015 forecast for UK property.

Their predictions in brief -

• Continued growth of Prime London markets and improved growth in secondary housing markets
•Average returns of just under 13%
• Further improvement in rental yields as investment inflows continue into the UK market
• Price growth in the housing market will ease in 2015 to around 6% 

Miles Gibson, Head of UK Research, CBRE, commented:

“This has been a year of extraordinary expansion across the property sector and while this will continue into 2015, overall there will be a return to more sustainable levels of growth. Rental growth will continue in all sectors and we expect investment yields to continue to improve as levels of capital flows into the UK market remain high. In terms of where growth, we forecast a ripple effect next year as property investors shift from London out to the regions.

“Although there positive signals for the property market, we recognise that there will be uncertainty caused by the imminent general election. The combination of these trends makes 2015 an intriguing prospect for the sector.” 

Download the CBRE Property Forecast for 2015

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Proposed rent caps in PRS

It's election year and landlords are set to be a key political target / punch bag on the run up to May.

Expect to hear plenty of beefy talk on additional regulation, licensing, tenancy reform and rent caps.

Civitas, the political think-tank haven't wasted any time getting in on the debate, publishing a new report of regulatory recommendations on January 2.

The reports author, Daniel Bentley, accuses landlords of exploiting the housing crisis at the expense of taxpayers and tenants, saying -

‘Unfortunately, the Housing Benefit system, which effectively props up purchasing power at the lower end of the market, militates against fair prices by subsidising landlords’ rent demands. This vicious circle will only worsen as the private-rented sector comes to represent an ever-larger proportion of the housing market and more and more tenants have to fall back on Housing Benefit.’

The report is calling for indefinite tenancies as the norm which are then linked to capped rent rises. Any rent rises that reach beyond this fixed rate would only be allowed if a landlord could prove they had made improvements to a property substantial enough to warrant it. 

In his report Bentley, proposes regulatory exemption of new build property as a means to shift landlords away from investing in the existing owner occupied market and over to new-builds.

For those of you who wish to read the full - Civitas Report on the Future of Private Renting

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